Calculate value of closing stock from the following:
Opening stock of finished goods (500 units) : Rs. 2,000
Cost of production (10000 units) : Rs. 50,000 Closing stock (1000 units):?
(a) Rs. 4,000
(b) Rs. 4,500
(c) Rs. 5,000
(d) Rs. 6,000
Answers
Answer:
c
Explanation:
5000 as per fifo method
sales = 9500 units
50000*1000/10000
hence inr 5000
Given:
Opening stock of finished goods (500 units) : Rs2,000 Cost of production (10000 units) : Rs50,000
To Find:
Calculate the value of closing stock
(a) Rs. 4,000
(b) Rs. 4,500
(c) Rs. 5,000
(d) Rs. 6,000
Solution:
Closing stock = 2000 units
we are following the method of first in first out, in this question opening stock is 500 units and production in the current year is 10000 units, so we will assume that 500 units have been sold and 1000 units in the closing stock is from the goods produced in the current year.
Particulars Quantity Rate Amount
1) opening 500 4 Rs2000
2) production 10000 5 Rs50000
Value of closing stock= 1000*5
=Rs 5000
Hence, the correct option is (c).